CIVIL CASE INFORMATION SHEET - ORIGINAL PETITION December 08, 2015 (2024)

Case

O FORECLOSURE et al vs. David Edward Parr

Aug 15, 2024 |ACEVES, MARIA |FORECLOSURE |DC-24-13727

Case

THE STATE OF TEXAS vs. MAXIE JOHNSON et al

Aug 23, 2024 |REDMOND, AIESHA |CODE VIOLATIONS |DC-24-13937

Case

NEWREZ LLC et al vs. DEBRA COX et al

Case

CITY OF DALLAS vs. ISIAH T PAYNE et al

Aug 22, 2024 |PURDY, MONICA |CODE VIOLATIONS |DC-24-13818

Case

O FORECLOSURE et al vs. Wayne M. Snape et al

Aug 19, 2024 |MOYE', ERIC |FORECLOSURE |DC-24-13626

Case

O FORECLOSURE et al vs. JAMITA J. MACHEN et al

Aug 21, 2024 |TILLERY, DALE |FORECLOSURE |DC-24-13549

Case

O FORECLOSURE et al vs. LUIS MENDOZA et al

Case

O FORECLOSURE et al vs. HERBERT FINNEY II et al

Case

WELLS FARGO BANK, N.A. et al vs. DAVID CISEK et al

Ruling

Sol Selection, LLC vs. All persons unknown

Aug 26, 2024 |23CV-0203590

SOL SELECTION, LLC VS. ALL PERSONS UNKNOWNCase Number: 23CV-0203590This matter is on calendar for review regarding status of default judgment. The Court notes that Plaintiff’s Requestto Enter Default Judgment was denied without prejudice on June 22, 2024. It appears that no further attemptshave been made to resolve the matter. An appearance is necessary on today’s calendar.

Ruling

MAHRT vs Cornerstone et al

Aug 30, 2024 |SCV-270601

SCV-270601, MAHRT v. Cornerstone et al. RLI’s request for judicial notice is GRANTED. The demurrer to the first cause of action isSUSTAINED WITHOUT LEAVE TO AMEND. The demurrer to the second cause of action isSUSTAINED WITH LEAVE TO AMEND. Macario’s cross-complaint is severed from case no. SCV-270601. It will proceed under thecaption David Macario DBA Macario Insurance Group v. RLI Insurance Company, Moes 1 through 50,inclusive, with a new case number to be assigned by the clerk. RLI’s counsel is directed to prepare a written order consistent with this tentative ruling andcompliant with California Rules of Court, rule 3.1312.I. Factual background In July 2021, Garry and Gillian Mahrt (collectively “Plaintiffs”) entered into an agreement topurchase a 158-acre ranch for $2.6 million. Defendant Cornerstone Land Co. (“Cornerstone”) was the realestate broker representing both Plaintiffs and the seller in the transaction. On August 16, 2021, Plaintiffswired the full purchase price according to transfer instructions they had received by email purporting to befrom Gabriel Foster (“Foster”), an agent with Cornerstone. Unfortunately, the email was a fraud sent bydefendant Yang Liu, one of the principals of defendant CASL International, who had hacked into computersin California and learned enough about Plaintiffs’ upcoming real estate transaction to enable him to createthe fraudulent email. As a result, Plaintiffs’ $2.6 million went into CASL’s account at defendant JPMorganChase Bank, from which it has since been withdrawn. Cross-complainant David Macario (“Macario”) was Cornerstone’s insurance broker. Cross-defendant RLI Insurance (“RLI”) was Cornerstone’s errors and omissions (“E&O”) insurer, a relationshipthat began in 2018. On August 17, 2021, Cornerstone, with Macario’s assistance, filled out an applicationto renew the E&O policy for the twelve months beginning on September 17, 2021. Question 9 on theapplication asked whether Cornerstone had “any knowledge of any incident, a circ*mstance, an event, orunresolved fee dispute that may result in a claim.” Cornerstone responded “no.” The application also statedthat if Cornerstone learned of any information that would change that answer prior to the effective date ofthe coverage, September 17, 20201, Cornerstone would notify RLI in writing of that information. Macariosent the renewal application to RLI on August 18, 2021. RLI alleges that Plaintiffs informed Cornerstone of their loss on August 20, 2021, that Cornerstonenotified Macario of the loss on August 23, that Plaintiffs’ attorney informed Cornerstone of an investigationinto the loss on December 6, and that on or about December 15, Macario instructed Macario to file a formalclaim with RLI. However, Cornerstone first apprised RLI of the loss on March 15, 2022. On April 29 andagain on May 12, RLI denied coverage on the basis that Cornerstone had failed to inform them of Plaintiffs’potential claim prior to the beginning of the coverage period on September 17, 2021.II. Procedural background The underlying lawsuit was initiated on April 14, 2022, when Plaintiffs filed a complaint againstCornerstone, Foster, JPMorgan Chase Bank, Yang Liu, and several other entities. On October 5, 2023, RLI sued Cornerstone in the Eastern District federal court, RLI Insurance v.Cornerstone (no. 2:23-cv-02265), seeking rescission of the 2021-2022 insurance policy on the grounds ofCornerstone’s misrepresentation that did not know of any pending claims. On December 19, 2023, Cornerstone cross-complained in the case at bar against Macario forprofessional negligence for failing to notify RLI of the potential claim when he became aware of it, and forequitable indemnity. On March 8, 2024, Macario filed a cross-complaint (“Cross-complaint”) against RLI for declaratoryrelief and equitable indemnity. RLI demurred to the Cross-complaint on June 4, 2024, and moved, in thealternative to sustaining the demurrer without leave to amend, for severance of Macario’s cross-action fromthe underlying lawsuit. This matter comes on calendar for hearing on that motion.III. Judicial notice RLI requests judicial notice of the First Amended Complaint, Cornerstone’s cross-complaint againstMacario, Macario’s cross-complaint against RLI, and RLI’s complaint against Cornerstone in the EasternDistrict federal court. The request is granted pursuant to Evid. Code § 452(d).IV. Demurrer A. Governing law A demurrer tests whether the complaint sufficiently states a valid cause of action. (Hahn v. Merda(2007) 147 Cal.App.4th 740, 747.) Complaints are read as a whole, in context, and are liberallyconstrued. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; see also Stevens v. Superior Court (1999) 75Cal.App.4th 594, 601.) In reviewing the sufficiency of a complaint, courts accept as true all material factsproperly pleaded, but not contentions, deductions, conclusions of fact or law, the construction ofinstruments pleaded, or facts impossible in law. (Rakestraw v. California Physicians’ Service (2000) 81Cal.App.4th 39, 43; see also South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732.)Matters which may be judicially noticed are also considered. (Serrano v. Priest (1971) 5 Cal.3d 584,591.) If a demurrer is sustained, leave to amend should be granted where the complaint’s defect can becured by amendment. (The Swahn Group, Inc. v. Segal (2010) 183 Cal.App.4th 831, 852.) A court abusesits discretion by denying leave to amend where there is any reasonable possibility that the plaintiff canstate a valid cause of action. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) However, “[l]eave toamend should be denied where the facts are not in dispute and the nature of the claim is clear, but noliability exists under substantive law.” (Lawrence v. Bank of America (1985) 163 Cal.App.3d 431, 436.)The burden is on the plaintiff to show how the complaint can be amended, and how that amendment willchange the legal effect of the pleading. (Goodman, supra, at p. 349.) B. First cause of action: declaratory relief In the Cross-complaint, Macario seeks “a declaration that [RLI is] obliged to indemnify the actionherein on behalf of [Cornerstone], and [Cornerstone] has a present right to receive a defense from [RLI].”(Cross-complaint, Prayer ¶ 1.) That is, in his first cause of action, Macario seeks this Court’s declarationthat RLI is required to honor the terms of its insurance policy with Cornerstone, despite not having beentimely informed of Plaintiffs’ potential claim against Cornerstone. “Any person interested . . . under a contract [may] bring an original action . . . for a declaration ofhis rights and duties in the premises, including a determination of any question of construction or validityarising under such instrument or contract.” (CCP § 1060.) RLI argues that Macario lacks standing toseek this relief because he is not a party to the insurance policy under which he seeks to compel RLI’sperformance, and therefore not “interested . . . under the contract.” The Court agrees that a non-party to acontract lacks standing to seek a declaration of rights under that contract. (See, e.g., Fladeboe v.American Isuzu Motors (2007) 150 Cal.App.4th 42, 55; Blank v. Kirwan (1985) 39 Cal.3d 311, 331.)Macario argues in response that has standing to seek declaratory relief because he was paid a commissionfor brokering the policy and is therefore a third-party beneficiary of it, and therefore has standing to sue toenforce it. (Oppo at pp. 5-6.) A third party may bring a cause of action on a contract only when three conditions are met: thethird party would in fact benefit from the contract; “a motivating purpose of the contracting parties was toprovide a benefit to the third party”; and “permitting a third party to bring its own breach of contractaction against a contracting party is consistent with the objectives of the contract and the reasonableexpectations of the contracting parties.” (Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 830.) “Allthree elements must be satisfied to permit the third party action to go forward.” (Ibid.) The contract at issue here, the insurance policy issued by insurer RLI for the benefit of insuredCornerstone, appears as Exhibit B to Exhibit D of RLI’s request for judicial notice. Nothing about itsuggests that a motivating purpose of RLI and Cornerstone was to provide Macario with a commission.Macario avers that “the contract explicitly includes Macario’s commission as part of the consideration.”(Oppo at p. 6.) Macario does not point out where in the contract that explicit inclusion is to be found, andit is not obvious to the Court. Nothing in the policy mentions a commission, or payment to a broker forarranging the policy, or anything along those lines. RLI’s response to Macario’s contention that thepolicy “explicitly includes Macario’s commission as part of the consideration” is that “It does no suchthing.” (Reply at p. 2, fn. 1.) The Court sees no basis to disagree with that assessment. Moreover, even if Macario were a third-party beneficiary, his ability to enforce the policy wouldextend only to the benefits he stood to receive. A third party suing on a contract “bears the burden ofproving that the promise he seeks to enforce was actually made to him personally or to a class of which heis a member.” (Neverkovec v. Fredericks (1999) 74 Cal.App.4th 337, 348-349.) If the policy contained aprovision that Macario was to be paid a commission – which, again, it does not – Macario could sue tocollect that commission if it was not paid, but he would still not be entitled to sue to enforce a promisemade by one of the contracting parties to the other one, because that would be a promise not made to himpersonally. The demurrer is sustained with respect to the first cause of action. Since Macario could notpossibly allege anything that would change the fact that he is not a party to the contract he seeks toenforce, leave to amend is denied. C. Second cause of action: equitable indemnity The principle of equitable indemnity “permit[s] the equitable sharing of loss between multipletortfeasors.” (American Motorcycle Association v. Superior Court (1978) 20 Cal.3d 578, 597; GemDevelopers v. Hallcraft Homes of San Diego, Inc. (1989) 213 Cal.App.3d 419, 426.) The operative wordis “tortfeasors.” Equitable indemnity is a tort concept. Cornerstone is suing Macario for professionalnegligence, so there is no question that he is alleged to be a tortfeasor. (RJN, Exh. B at p. 9.) Thequestion, then, is whether RLI is a joint tortfeasor; that is, whether Cornerstone’s damages, which consistof exposure to potential liability for Plaintiffs’ claims with no insurance coverage, are caused by RLI’stortious conduct, in addition to Macario’s alleged tortious conduct. RLI’s argument, in summary, is thatRLI cannot possibly be a joint tortfeasor because its relationship with Cornerstone is based purely oncontract, specifically on the insurance policy. Macario argues that his “involvement in the alleged wrongful acts, including misrepresentation ofthe Policy requirements, when combined with RLI’s subsequent actions denying coverage, does establisha basis for tort liability.” (Oppo at p. 10.) He does not explain how it establishes that. However, thesecond paragraph in the equitable indemnity cause of action comes close: “Therefore, CROSS-COMPLAINANT would be entitled to complete or partial equitable indemnity from CROSS-DEFENDANTS if the damages and relief claimed are covered under the any [sic] policy issued byCROSS-DEFENDANT.” It is possible for an insurer to wrongfully deny coverage and incur only liabilityfor breach of contract; if that were the situation, RLI’s (hypothetical) wrongful action would not makeRLI a joint tortfeasor, and RLI could, therefore, not be liable for equitable indemnity. However, if RLI’sdenial of coverage were not only wrongful, and not only breach of contract, but also a tort, then RLIwould arguably be a joint tortfeasor. An insurer’s denial of coverage can be a tort if it is done in bad faith. “An insurer is said to act in‘bad faith’ when it not only breaches its policy contract but also breaches its implied covenant to dealfairly and in good faith with its insured.” (Jordan v. Allstate Insurance Co. (2007) 148 Cal.App.4th 1062,1071.) “When the insurer unreasonably and in bad faith withholds payment of the claim of its insured, itis subject to liability in tort.” (Frommoethelydo v. Fire Insurance Exchange (1986) 42 Cal.3d 208, 214-215.) Thus, in theory, Macario and RLI could be joint tortfeasors if Cornerstone’s injury resulted from acombination of Macario’s professional negligence and RLI’s bad faith denial of Cornerstone’s claim.(See, e.g., National Union Fire Ins. Co. (2004) 118 Cal.App.4th 1061, 1078.) Since the second cause of action incorrectly alleges that Macario would be entitled to equitableindemnity from RLI in the case of any wrongful denial of coverage, the demurrer is sustained as to thatcause of action. However, leave to amend is granted. Macario may amend the second cause of action toallege that he would be entitled to equitable indemnity if RLI is found to have denied Cornerstone’s claimin bad faith. The Court takes no position on whether Macario could prove such an allegation, but thatquestion does not arise at the demurrer stage.V. Severance of the cross-action A. RLI is not an appropriate party to this lawsuit “Generally an insurer may not be joined as a party-defendant in the underlying action against theinsured by the injured third party. The fact that an insurer has agreed to indemnify the insured for anyjudgment rendered in the action does not make the insurer a proper party. Liability insurance is not acontract for the benefit of the injured party so as to allow it to sue the insurer directly.” (Royal SurplusLines Ins. Co. v. Ranger Ins. Co. (2002) 100 Cal.App.4th 193, 200, citing Rutter Group, Cal. PracticeGuide: Insurance Litigation ¶ 15.11.) This principle springs from Evid. Code § 1155, which provides thatevidence that a defendant was insured at the time of an injury “is inadmissible to prove negligence orother wrongdoing.” RLI argues that this principle requires the Court to either sustain the instant demurrerwithout leave to amend or sever Macario’s cross-complaint against RLI from the case at bar. The Court agrees. The point of this rule is to avoid the trial of a personal injury action and anaction against the defendant’s insurer before the same jury, because in such a trial, “the fact of [thedefendant’s] liability insurance would . . . be disclosed to the jury which would be determining the issuesinvolved, a circ*mstance which is generally held a matter of prejudice.” (State Farm Mutual Auto. Ins. v.Superior Court (1956) 47 Cal.2d 428, 432.) The holding to which the court referred became a statutoryrule when Evid. Code § 1155 took effect in 1967. “A joint trial against the insured for negligence andagainst the insurer for violating its duties under [Ins. Code § 790.03(h), which prohibits unfair claimssettlement practices] would obviously violate both the letter and spirit of [Evid. Code § 1155].” (RoyalGlobe Ins. Co. v. Superior Court (1979) 23 Cal.3d 880, 891.) Moradi-Shalal v. Fireman’s Fund (1988)46 Cal.3d 287 overruled Royal Globe on the issue of whether there is a private cause of action againstinsurers for unfair settlement practices, but cited the above-quoted passage from Royal Globe withapproval as authority for sustaining the insurer’s demurrer. (Id. at p. 306.) In State Farm, supra, the insurer brought a declaratory relief action against its insured, Collins,seeking a determination of whether the automobile accident in which Collins had been involved wascovered by the policy. (State Farm, supra, 47 Cal.2d at p. 430.) While that action was pending, severalpeople who had been involved in the accident sued Collins. (Ibid.) The trial court consolidated theactions, resulting in a case involving both a tort action against Collins and a coverage action betweenCollins and the insurer. (Ibid.) Our Supreme Court held that the consolidation was an abuse of discretionand ordered the two actions severed. (Id. at p. 433.) In Royal Globe, supra, the plaintiff sued both thefood market where she had fallen and its insurer. (Royal Globe, supra, 23 Cal.3d at p. 884.) Althoughthe Supreme Court agreed with the plaintiff that “a third party claimant may sue an insurer” for violationsof the statute prohibiting unfair claims practices, it held that such a lawsuit must be separate from thepersonal injury action against the claimant. (Ibid.; again, the former holding was subsequently overturnedby Moradi-Shalal, supra.) The situation here differs slightly. State Farm and Royal Globe both involved a single individualwho was the defendant in the underlying tort action and also engaged in a dispute with the insurerregarding his own coverage (as a plaintiff in the case of Royal Globe and as a defendant in the case ofState Farm). Here, in contrast, the cross-defendant in the cross-action for malpractice, Macario, has suedthe insurer, RLI, over its coverage of someone else, the cross-complainant Cornerstone. That would be acrucial distinction if the cross-action were the entire lawsuit. The evil that the rule under discussion seeksto avoid is a jury learning that a defendant has insurance coverage, which Evid. Code § 1155 forbids thejury from knowing. All the jury would learn at a trial of the cross-action is that Cornerstone has insurancecoverage, which could not prejudice them in favor of granting damages to Cornerstone and againstMacario since Cornerstone would not be a party. However, the cross-action is not the entire lawsuit. The case at bar is, at its core, an action by theMahrts against Cornerstone. That is, in addition to being a cross-complainant, Cornerstone is also adefendant. Therefore, under Evid. Code § 1155, the jury is not permitted to know that Cornerstone hasinsurance that might arguably cover the plaintiffs’ damages, even under the circ*mstance that the insurerdisputes coverage. If this lawsuit proceeds as currently structured, the jury would inevitably learn that.Therefore, RLI is not an appropriate party. B. The authorities cited by Macario are not to the contrary. Macario states that his “situation is distinguishable because his claim involves professionnegligence and the need for equitable indemnity,” and that his “claims against RLI involve allegations ofprofessional negligence and the handling of the insurance claim.” (Oppo at pp. 12, 13.) (To be clear, it isCornerstone’s claim against Macario that involves allegations of professional negligence.) As authorityfor the proposition that these facts change anything, Macario cites to Otay Land Co. v. Royal IndemnityCo. (2008) 169 Cal.App.4th 556, characterizing it as an example of “situations where insurers have beenincluded due to their significant involvement in the underlying issues.” (Oppo at p. 13.) In Otay, theinsurer was included because it was the defendant: Otay is a simple two-party lawsuit by an insuredagainst its insurer for a declaratory judgment regarding coverage. (Id. at p. 558.) It does not address theissue presented here of an insurer and its insured both being sued by someone else in the same lawsuit. Macario also asserts that “[t]his almost precise scenario was presented in” Royal Surplus, supra,100 Cal.App.4th 193. (Oppo at p. 14.) “Almost precise” is not the same as “precise”; Royal Surpluscomes somewhat closer than Otay to being on point, but is distinguishable on its facts. There, a generalcontractor and its insurer (respectively Ocean and Royal Surplus) sued a subcontractor and its insurer(respectively Ultimate and Ranger) for indemnity after tenants of an apartment complex built by Ocean,with framing work done by Ultimate, sued Ocean over habitability issues. (Id. at pp. 196-197.) The trialcourt “sustained Ranger’s demurrer without leave to amend solely on the ground of misjoinder in that itwas improper to name both the insured and insurer in the same action.” (Id. at p. 198.) That is, the trialcourt dismissed the case on the same grounds upon which RLI urges this Court to dismiss Macario’scross-complaint. The reviewing court reversed. However, the reason for the reversal was that Ocean and Ultimatehad an explicit indemnification agreement “that required Ultimate to defend and indemnify Ocean forclaims arising out of Ultimate’s work,” and also required Ocean to be named as an additional insured onUltimate’s policy with Ranger. (Royal Surplus, supra, 100 Cal.App.4th at p. 196.) Therefore, this wasnot a so-called third-party case where an injured party sues both the party that injured him and that party’sinsurer; it was a first-party case where an injured party sued its own insurer, which is what Ranger waswith respect to Ocean under the indemnification agreement. (Id. at p. 200 [“If Ocean is an additionalinsured, then it is a first party”].) No such agreement exists here. In contrast to Royal Surplus, this is purely a third-party actionwhere a party (Macario) not in contractual privity with the insurer (RLI) is contesting the insurer’scoverage decision regarding a third party (Cornerstone). Thus, Royal Surplus does not contradict RLI’sargument that it will be severely prejudiced, in precisely the manner Evid. Code § 1155 is intended toprevent, if it is forced to litigate RLI’s claim in the same case as the Mahrts’ action against RLI’s insuredCornerstone. Finally, Macario avers that in Omaha Indemnity Co. v. Superior Court (1989) 209 Cal.App.3d1266, “the court acknowledged that insurers could be included in actions where their involvement in theunderlying issues was significant.” (Oppo at p. 15.) Omaha involves a lawsuit by landlords againsttenants who had damaged the landlords’ rental property, as well as against Omaha, the tenants’ insurer.(Id. at p. 1269.) Omaha demurred on the basis that the tenants “were not parties to the contract ofinsurance and, therefore, had no standing to pursue a claim for declaratory relief.” (Id. at pp. 1269-1270.)(That is, on the same basis upon which RLI demurs to Macario’s first cause of action.) The trial courtoverruled the demurrer; correctly, as the reviewing court determined, because just as in Royal Surplus, theinsurance policy was “for the mutual benefit of landlord and tenant.” (Id. at p. 1269.) Therefore thelandlords were “the intended beneficiaries of the insurance policy. . . . In such instances, an action fordeclaratory relief is appropriate.” (Id. at pp. 1269, 1270.) However, this did not satisfy Omaha, which insisted that despite being in contractual privity withthe landlords, “it would suffer prejudice should the lawsuit against both itself and the [tenants] goforward.” (Omaha, supra, 209 Cal.App.3d at p. 1270.) As RLI has done here, Omaha had moved in thetrial court, as an alternative to sustaining their demurrer, to sever the declaratory relief action against themfrom the tort lawsuit against the tenants. (Ibid.) The trial court had denied that motion. After severallitigation maneuvers not relevant here, the reviewing court agreed that the actions needed to be severed inorder to avoid prejudice to Omaha, and issued a writ of mandate ordering the trial court to grant themotion to sever. (Id. at p. 1275.) As with Royal Surplus, the reviewing court’s ruling on the demurrer was based on the point thatthis was a first-party lawsuit; that is, that the plaintiffs were in contractual privity with the insurer. Again,that is not the situation here. However, as discussed next, the Omaha’s holding that “the trial courtabused its discretion when it denied Omaha’s motion to sever,” is highly relevant here. (Omaha, supra,209 Cal.App.3d at p. 1271.) C. Macario’s cross-complaint for equitable indemnity is severed from the underlying action. “The court, in furtherance of convenience or to avoid prejudice, or when separate trials will beconducive to expedition and economy, may order a separate trial of any cause of action, including a causeof action asserted in a cross-complaint.” (CCP § 1048(b).) “[A] complaint and a cross-complaint are, formost purposes, treated as independent actions. [Citations.] It is within the discretion of the court to ordera severance and separate trials of such actions [citations], and the exercise of such discretion will not beinterfered with on appeal except when there has been a manifest abuse thereof.” (McLellan v. McLellan(1972) 23 Cal.App.3d 343, 353, citing McArthur v. Shaffer (1943) 59 Cal.App.2d 724, 727.) RLI requests that in the event the Court does not dismiss Macario’s cross-complaint altogether, itsever the cross-action from the underlying lawsuit by the Mahrts against RLI’s insured Cornerstone.(MPA at pp. 18-19; Reply at p. 9.) Macario expresses a preference for proceeding in the current action,but provides no authority for the proposition that he is entitled to do so. (Oppo at p. 15.) His commentthat “without the inclusion of RLI in this action, there is . . . the possibility that the rights of Macario maybe essentially adjudicated in a proceeding in which he is not a participant (i.e. – the federal court action)”presumably refers to the point that his cause of action for declaratory relief in the instant case is anattempt to resolve the same question that is before the Eastern District in the RLI Insurance v. Cornerstonecase: whether the RLI/Cornerstone insurance policy is active and enforceable. But as discussed above, thatis between RLI and Cornerstone irrespective of what court it is litigated in or who else is a party to thelitigation. The Court agrees that the severance RLI requests is the best way to permit Macario to go forwardwith an action for equitable indemnity without prejudicing RLI by disclosing to the Mahrt v. Cornerstonejury that it is Cornerstone’s insurer. (Evid. Code § 1155.) Accordingly, the Court orders that Macario’scross-complaint against RLI be severed, and proceed as a separate lawsuit.VI. Conclusion The demurrer to the first cause of action is sustained without leave to amend. The demurrer to thesecond cause of action is sustained with leave to amend. Macario’s cross-complaint is severed.

Ruling

HUGH FARZANEH, INDIVIDUALLY AND VS SHIVA SAFAEE, ET AL.

Aug 30, 2024 |6/18/2022 |19SMCV01876

Case Number: 19SMCV01876 Hearing Date: August 30, 2024 Dept: I The court has already issued the judgment. Accordingly, there will be no hearing today and the court will set no future hearings.

Ruling

HYSON vs SELECT PORTFOLIO SERVICING INC.

Sep 01, 2024 |CVPS2403212

HYSON vs SELECT PORTFOLIO Motion to be Relieved as Counsel forCVPS2403212SERVICING INC. LINDA HYSONTentative Ruling: Grant. Moving counsel is ordered to lodge with the Court within 5 days a revisedproposed order including all upcoming hearing dates. Counsel is reminded that they are not relieveduntil they have filed with the Court proof of service of the signed order upon their client.

Ruling

Aug 28, 2024 |24STCV00859

Case Number: 24STCV00859 Hearing Date: August 28, 2024 Dept: 47 Tentative Ruling Judge Theresa M. Traber, Department 47 HEARING DATE: August 28, 2024 TRIAL DATE: NOT SET CASE: Wilton Holdings & Management LLC v. 8210 Sunset, LLC et al. CASE NO.: 24STCV00859 MOTINO TO CONSOLIDATE MOVING PARTY: Plaintiff Wilton Holdings & Management LLC RESPONDING PARTY(S): Defendant 8210 Sunset, LLC; CASE HISTORY: · 01/12/24: Complaint filed. · 02/28/24: Complaint in Intervention filed. · 07/14/24: Complaint filed in 8210 Sunset, LLC v. Wilton Holdings & Management, LLC, Case No. 24SMCV03406 · 08/13/24: Cases deemed related. This case designated as lead case. STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS: This is a breach of contract and wrongful eviction action. Plaintiff alleges that it subleased a commercial property from Defendants in order to operate a cannabis business. The property allegedly had serious structural and habitability defects which Defendants neither disclosed nor remedied. Plaintiffs further allege that Defendants subsequently locked Plaintiffs out of the property without formally terminating the lease agreement. Plaintiff moves to consolidate this case with the unlawful detainer proceeding filed against it entitled 8210 Sunset, LLC v. Wilton Holdings & Management, LLC, Case No. 24SMCV03406. TENTATIVE RULING: Plaintiffs Motion to Consolidate is DENIED IN PART as to the request that the cases be consolidated for trial. The Court invites argument about whether the two cases should be consolidated with respect to certain overlapping discovery, resolution of identical issues via motions for summary judgment or otherwise, or other aspects of the cases. DISCUSSION: Plaintiff moves to consolidate this action with the related unlawful detainer action entitled 8210 Sunset, LLC v. Wilton Holdings & Management, LLC, Case No. 24SMCV03406. Legal Standard for Consolidation When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay. (Code Civ. Proc. § 1048(a), bold emphasis added.) Request for Judicial Notice Plaintiff requests that the Court take judicial notice of (1) the Assignment Agreement between Plaintiff, Boulevard Nightlife Group LLC, and Elan Kermani dated June 27, 2023, also attached as Exhibit B to the Complaint in this action; (2) the Courts January 18, 2024 Temporary Restraining Order in this action; (3) the Courts April 22, 2024 order issuing a preliminary injunction in this action; (4) the docket in this action and the Unlawful Detainer Action; and (5) Code of Civil Procedure section 1048. Plaintiffs requests Nos. 1 through 4 are GRANTED pursuant to Evidence Code section 452(d) (court records). The Court emphasizes that, for records other than the Courts own orders, the Court takes judicial notice only of the existence of these records and not the truth of their contents. Plaintiffs request no. 5 is GRANTED pursuant to Evidence Code section 452(b) (legislative acts). Procedural Requirements A motion to consolidate must satisfy the requirements of California Rules of Court Rule 3.350, which provides, in relevant part: (a) Requirements of motion (1) A notice of motion to consolidate must: (A) List all named parties in each case, the names of those who have appeared, and the names of their respective attorneys of record; (B) Contain the captions of all the cases sought to be consolidated, with the lowest numbered case shown first; and (C) Be filed in each case sought to be consolidated. (2) The motion to consolidate: (A) Is deemed a single motion for the purpose of determining the appropriate filing fee, but memorandums, declarations, and other supporting papers must be filed only in the lowest numbered case; (B) Must be served on all attorneys of record and all nonrepresented parties in all of the cases sought to be consolidated; and (C) Must have a proof of service filed as part of the motion. (Cal. Rules of Court Rule 3.350(a).) The moving party has not listed the parties who have appeared in each case in the notice of motion, as required by Rule 3.350(a)(1)(A). That said, Plaintiff sets forth each involved party in the body of the motion, though it does not state whether each party has appeared. Plaintiff merely recites the abbreviated case names with docket numbers for each of the cases at issue. (See Notice of Motion p.2.) The moving party also has not listed the names of the respective attorneys of record, as required by Rule 3.350(a)(1)(A). The moving party has not included the captions of both cases, as required by Rule 3.350(a)(1)(B). Further, the notice of motion was not filed in the Unlawful Detainer Action, as required by Rule 3.350(a)(1)(C). It appears that the moving party served the attorneys of record for each party, as required by Rule 3.350(a)(2)(B). As noted, however, the moving party did not comply with the other procedural requirements. Nevertheless, since the opposing party did not raise objections to these procedural issues, the Court will consider the motion on its merits. Consolidation of Actions for Trial Plaintiff seeks to consolidate this action with the unlawful detainer action. Whether separate actions shall be consolidated for trial is a matter within the discretion of the trial court and its decision will not be disturbed on appeal absent a clear showing of abuse of discretion. (Citation omitted.) . . . A consolidation of actions does not affect the rights of the parties. The purpose of consolidation is merely to promote trial convenience and economy by avoiding duplication of procedure, particularly in the proof of issues common to both actions. (Citation omitted.) (Estate of Baker (1982) 131 Cal.App.3d 471, 485.) Plaintiff asserts that consolidation of these matters is appropriate because both cases concern the rights and obligations arising from a lease and subsequent assignment of real property. Unlawful detainer proceedings may not generally be tried together with other causes, as doing so would tend to frustrate the purpose of the unlawful detainer statutes to afford an expeditious and adequate remedy for obtaining possession of premises wrongfully withheld by tenants. (Childs v. Eltinge (1973) 29 Cal.App.3d 843, 853.) That said, consolidation is permissible when title to the property is at issue. (Martin-Bragg v. Moore (2013) 219 Cal.App.4th 367, 391.) Although Plaintiff cites Martin-Bragg and asserts that title to the property is at issue, that contention is belied by the pleadings. In Martin-Bragg, the defendant in the unlawful detainer proceeding asserted a challenge to the plaintiffs ownership of the property and sought to quiet title based on a claim of equitable ownership. (Martin-Bragg, supra, 219 Cal.App.4th at 371-72.) The Court of Appeal concluded that the trial court abused its discretion in refusing to consolidate because [t]he law affords substantial procedural rights to litigants in cases involving adjudication of complex issues of legal and beneficial title to property which were compromised by the trial courts insistence on trying those complex issues using the summary procedures that are approved only for the determination of a landlords right to possession in straightforward unlawful detainer proceedings. (Id. at 394-95.) In this case, however, Plaintiff does not dispute 8210 Sunset, LLCs ownership of the property, only whether 8210 Sunset and the master tenants complied with their obligations under the lease agreement and the assignment agreement. (See generally Complaint.) The Court therefore has no basis to depart from the general rule that unlawful detainer proceedings may not be consolidated for trial with matters beyond those slated for decision in the unlawful detainer case. Thus, the Court rules that it would be improper to consolidate the two cases for purposes of trial but considers it possible and even advisable to consolidate certain aspects of the cases to streamline discovery and/or resolution of overlapping issues based on motions for summary adjudication or otherwise. Because the parties briefing addresses consolidation as an all-or-nothing proposition, the Court will solicit argument about whether any aspects of the two cases should be consolidated to facilitate prompt resolution of overlapping issues and avoid unnecessary duplication. CONCLUSION: Accordingly, Plaintiffs Motion to Consolidate is DENIED IN PART as to the request that the cases be consolidated for trial. The Court invites argument about whether the two cases should be consolidated with respect to certain overlapping discovery, resolution of identical issues via motions for summary judgment or otherwise, or other aspects of the cases. Moving Party to give notice. IT IS SO ORDERED. Dated: August 28, 2024 ___________________________________ Theresa M. Traber Judge of the Superior Court Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.

Ruling

Jason Neel vs United States Real Estate Corporation, et al

Aug 28, 2024 |22CV01758

22CV01758NEEL v. SUPERIOR LOAN SERVICING, et al CROSS-DEFENDANT DONALD SCHWARTZ’S SPECIAL MOTION TO STRIKE As discussed below, the motion is denied. I. BACKGROUND This is a convoluted fact pattern, which stems from plaintiff Neel’s efforts to forestall theforeclosure of his home and unwind allegedly fraudulent conveyances encumbering his home.Plaintiff’s allegations are as follows: Plaintiff owns property which was purchased “free and clear” in 2018, located at 144Palo Verde Terrace, Santa Cruz. Plaintiff has cognitive impairments. In January and March2018, plaintiff committed various criminal offenses. In March 2018, plaintiff hired DonaldSchwartz and Ed Russo to represent him. In addition to his criminal charges, plaintiff’s erraticbehavior also caused the HOA where his home is located to bring a civil suit against him.Schwartz was his attorney in that matter as well. (FAC ¶¶ 18-20.) According to the allegations in the FAC, from January 2018 to August 2020, plaintiff wasunable to manage his financial affairs, unable to contract with knowledge or understanding, andsusceptible to financial abuse. Between April 2019 and November 2019, plaintiff was declaredincompetent to stand trial for certain criminal offenses. During a portion of this period, plaintiffwas a patient at Napa State Mental Hospital. Plaintiff has been diagnosed with Psychotic orSchizoaffective Disorder, Bipolar II, Dissociative Disorder, and Social Anxiety. Attorney Schwartz raised the issue of plaintiff’s lack of capacity in the HOA civil actionand at one point, requested the court name a guardian ad litem. The guardian ad litemrecommended by Schwartz was Cody Molica. Plaintiff granted a power of attorney (“POA”) to Page 6 of 14Molica to pay his expenses while incarcerated. Molica, a law school graduate who had workedwith both Schwartz and Russo, agreed to serve as plaintiff’s attorney in fact. On 3/17/19,plaintiff executed a POA in favor of Molica. Plaintiff thought his powers were limited to payingbills. (FAC ¶ 21.) Prior to the execution of POA #1, Molica and co-conspirator Derek Wheat had alreadyarranged with defendant CNA Equities Group, LLC (“CNA”) to borrow money againstplaintiff’s residence, which was debt-free. This loan was taken out without either plaintiff’sconsent or knowledge. Molica engaged CNA to broker a loan of $367,500. The lender was Yeva,Inc. dba Saxe Mortgage Co. The escrow was handled by Fidelity Escrow Co. (FAC ¶ 23.) Molica allegedly orchestrated a fraudulent lease agreement between plaintiff and NathanPerry to characterize the loan as one for business purposes. The lease was dated retroactively forthe three-year period of 10/1/17-10/1/20 and called for $2,500/month rent. Neel does not knowPerry and Perry never lived at the residence and ultimately received $10,430 in checks from the2019 loan proceeds. The lease agreement predated Neel’s January 2018 purchase of the Property.(FAC ¶ 24.) Molica is alleged to have completed fraudulent and inaccurate Uniform ResidentialLoan Applications on behalf of Neel, which reported that Neel received $2,500/month in rentalincome from the property. (FAC ¶25.) The net proceeds of the loan were distributed to Schwartz’s Trust account on 3/27/19,where Molica directed Schwartz to distribute the funds. None of the funds were used forplaintiff’s benefit. One check of $60,000 was paid to Jeffrey Vieyre of Funding Solutions. (FAC¶ 26.) On 5/1/19, Schwartz drafted a new POA requiring both Schwartz’s and Molica’ssignatures and stated the POA was only for paying bills and HOA issues and not for aspects ofthe house. At the time the second POA was executed, plaintiff was unaware Molica already usedthe POA to affect his home via the new loan. (FAC ¶ 27.) Molica withdrew over $1,000,000 from plaintiff’s bank account, using the two POAs. Athird POA was executed on 5/28/20. On 9/9/20, Molica refinanced the property for $439,000which paid off the 2019 loan; two days later it was mortgaged for an additional $35,000. (FAC¶¶ 28-30.) Plaintiff contends the refinance was done for no valid financial reason and actuallycost Molica money to obtain. CNA’s files contain another Residential Loan Application signed by Molica withnumerous fraudulent statements. (FAC ¶ 32.) Defendants CNA and Rushmyfile (“RMF”) co-brokered the 2020 Loan. Defendants United States Real Estate Corporation (“USREC”), CNA,and RMF knew Molica had failed to make any of the payments on the 2019 loan, that the Page 7 of 14refinance was fraudulent, that none of the loans were for business purposes, and that the 2020loans were also fraudulently obtained. (FAC ¶34.) After Molica failed to make payments on the 2020 Loan, USREC instructed DefendantSuperior Loan Servicing to commence foreclosure proceedings. Neel has delivered notices ofrecission. USREC filed a Notice of Default and election to sell on 4/16/21. On 7/23/21, USRECfiled a Notice of Trustee’s Sale. II. PLEADINGS A. Complaint and amended complaint Plaintiff originally filed this action in Alameda County on 8/13/21 to halt USREC’spending non-judicial foreclosure. Scwhartz was plaintiff’s original attorney of record, butsubstituted out in favor of plaintiff’s current counsel on 11/19/22. The action was subsequentlytransferred to Santa Cruz Superior Court by stipulation, and thereafter, plaintiff filed hisoperative first amended complaint (“FAC”) on 10/11/22. The FAC added new causes of actionand new party defendants, among others, including the brokers involved in the USREC Loan,CNA Equities Group, LLC (“CNA”) and Rushmyfile, Inc. (“RMF”). The FAC alleges thatplaintiff is a dependent adult who lacks mental capacity, that plaintiff was fraudulently inducedto sign the subject powers of attorney, and that plaintiff had no knowledge of either of the loans.The FAC further alleges that the subject loans were part of an extended scheme to convert andsteal the equity in plaintiff’s property. (FAC ¶¶ 21-38.) The fraud scheme was allegedly directedby unnamed third parties and Molica, the attorney-in-fact appointed in the powers of attorney,who has been defaulted under USREC’s cross-complaint. (FAC ¶¶ 22-23, 28.) The FAC allegesthat the broker and lender defendants facilitated the fraud by accepting fraudulent loanapplications and documentation. (FAC ¶¶ 24-25, 29-35, 40-41.) B. Cross-complaint On 12/13/22, USREC cross-complained against Neel, CNA, RMF, and Molica fordeclaratory relief, reformation, quiet title, equitable subrogation, equitable lien, judicialforeclosure, implied contractual indemnity and equitable indemnity. USREC claims to be a bonafide encumbrancer who made the loan to plaintiff in good faith without knowledge of plaintiff’salleged lack of capacity or the scheme. The cross-complaint seeks to affirm the validity of theUSREC Deed of Trust or, alternatively, force judicial foreclosure of a lien by equitablesubrogation in the amount of at least $407,328, representing the amount of the USREC loanproceeds used to satisfy in full all prior liens against the property. USREC’s Cross-Complaintalso seeks indemnity against brokers CNA and RMF, Molica and Roes 25-50. (Cross-Complaint¶¶41-49.) Page 8 of 14 C. Doe amendment adding Schwartz as defendant On 11/20/23, plaintiff Neel named Schwartz as Doe 1 under his causes of action forabuse of a dependent adult, conversion, and aiding and abetting. Plaintiff alleges that Schwartz,who was plaintiff’s attorney from 2018 to 2022 and had raised plaintiff’s lack of mental capacityin various proceedings, caused Molica to be appointed plaintiff’s guardian ad litem, suggestedplaintiff give Molica the power of attorney for the 2019 loan, drafted at least one other power ofattorney plaintiff signed in favor of Molica and Schwartz, and facilitated distribution of loanproceeds for the benefit of third parties other than plaintiff. (FAC ¶¶ 19-23, 26-30.) Schwartzanswered on 11/27/23. D. Roe amendment adding Schwartz as cross-defendant On 1/26/24, USREC named Donald Schwartz as Roe 25 to the cross-complaint for theseventh cause of action for implied contractual indemnity and for the eighth cause of action forequitable indemnity. (Cross-Complaint, 12/13/22.) On 6/4/24, USREC voluntarily dismissed Schwartz from the implied contractualindemnity cause of action, leaving Schwartz as a Roe for equitable indemnity only. (Dismissal,6/4/24.) III. MOTION A. Moving papers Cross-defendant Schwartz moves to strike the cross-complaint for equitable indemnitypursuant to CCP § 425.16(b)(1), “A cause of action against a person arising from any act of thatperson in furtherance of the person’s right of petition or free speech under the United StatesConstitution or the California Constitution in connection with a public issue shall be subject to aspecial motion to strike, unless the court determines that the plaintiff has established that there isa probability that the plaintiff will prevail on the claim.” (Emphasis added.) Moving party fails to identify the type of free speech allegedly at issue here. Undersection 425.16(e), there are four types of petitioning or speech: (1) Any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) Any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, Page 9 of 14 (3) Any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) Any other conduct in furtherance of the exercise of constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest. (CCP §425.16(e).) The only protected activity identified by Schwartz is “the filing of this instant action ascounsel for Mr. Neel and handling a completely unrelated trust account transaction.” (MPA p. 8.)This would fall under categories (1) and (2), above. Schwartz contends that his filing of the underlying complaint on Neel’s behalf againstUSREC is petitioning or free speech activity and that USREC cannot succeed on its claim ofequitable indemnity against Schwartz since it is procedurally defective and cannot overcome thelitigation privilege or an attorney’s absolute immunity when acting as an agent. Schwartz relieson Navellier v. Sletten (2002) 29 Cal.4th 82, 89, to support his claim. Under Navellier, “thecritical consideration is whether the cause of action is based on the defendant’s protected freespeech or petitioning activity.” (Navellier v. Slettin, supra, 29 Cal.4th at 89.) Schwartz alsoargues the equitable indemnity cause of action “insinuates a conspiracy” between Neel andSchwartz and so must comply with CCP § 1714.10 which requires a showing of reasonableprobability of prevailing in the action with supporting affidavits. He contends no suchcompliance with section 1714.10 can be found in the cross-complaint and it is therefore “doomedto failure.” Schwartz contends that the cross-complaint is an end run around the attorney clientrelationship (between him and Neel) and USREC seeks to force him to testify against his client. B. Opposition USREC argues that Schwartz cannot meet the first prong of the anti-SLAPP analysissince the indemnity cross-complaint is not based on Schwartz’s right of petitioning or freespeech. It contends that Schwartz has been sued by plaintiff for the fraudulent scheme and byUSREC only for contribution as an alleged joint tortfeasor. It argues that an anti-SLAPP motionis justified only when the conduct upon which the claim is based is an act in furtherance of theright to petition. Merely because some protected activity may have occurred preceding thecomplaint is not enough; the conduct constituting the protected activity is itself the wrongcomplained of. (Park v. Board of Trustees of Calif. State Univ. (2017) 2 Cal.5th 1057, 1060.) Essentially, USREC argues that no petitioning activity is involved at all in its claim forindemnity in the event it is liable. The Cross-Complaint alleges: “In the event it is determined that the USREC Deed of Trust is invalid, in whole or inpart, such resulting loss to Cross-Complainant will arise solely by reasons of the cross-defendants’ intentional or negligent conduct,” and “if Cross-Complainant suffers loss or damages Page 10 of 14as a result of Plaintiff’s claims, such damages were caused entirely or partly by the breach ofcontract, violation of statutory duty, negligence, fraud, or other tortious conduct of the cross-defendants.” (Cross-Complaint ¶¶ 42, 46.) USREC argues these allegations fail to mention nor rely upon protected petitioning orfree speech activity by Schwartz and instead, they allege a straightforward claim for equitableindemnity against Schwartz and USREC’s other alleged joint tortfeasors based on plaintiff’sallegations of a fraudulent power of attorney and mortgage loan scheme. USREC points out this is Schwartz’s second anti-SLAPP motion in an apparent effort tostall discovery and prevent his deposition from proceeding. The first motion was brought justprior to Schwartz’s noticed deposition, then Schwartz filed for bankruptcy and withdrew the firstmotion. Once the bankruptcy was dismissed, meaning this case’s discovery could proceed,Schwartz filed this second anti-SLAPP motion, effectively staying this case’s discovery again. C. Reply Cross-defendant’s reply argues the cross-complaint against him was filed to gainadvantage and should be viewed with distrust. He contends he never owed any duty to USRECand actually secured restraining orders against it to stop the foreclosure of Mr. Neel’s home. Inshort, the reply does not persuade this Court that petitioning activity arises from USREC’s cross-complaint against Schwartz. III. LEGAL STANDARDS A. Anti-SLAPP The Legislature enacted Code of Civil Procedure section 425.16, known as the anti-SLAPP statute, to provide a procedural remedy to dispose of lawsuits and causes of action thatare brought to chill the valid exercise of the constitutional rights to free speech and to petition thegovernment for redress of grievances. (See Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056.) The court must engage in a two-prong analysis on an anti-SLAPP motion, with shiftingburdens of proof as to each prong. In prong one, the court determines whether the conductunderlying plaintiff’s cause of action arises from defendant’s constitutional rights of free speechor petition. (Baral v. Schnitt (2016) 1 Cal.5th 376, 395.) This is a threshold issue; if moving partyfails to show the conduct is constitutionally protected, the court need not address prongtwo. (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 733.) Under the second prong,the burden shifts to plaintiff to prove a legally sufficient claim and to prove with admissibleevidence a reasonable probability of prevailing. (Navellier v. Sletten (2002) 29 Cal.4th 82,88.) Plaintiff cannot rely on the allegations of the complaint but must produce evidence Page 11 of 14admissible at trial. (HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.)To defeat the motion, plaintiff need only demonstrate a prima facie case as to either part of theclaim. (Siam v. Kizilbash (2005) 130 Cal.App.4th 1563, 1570; Weil & Brown, CaliforniaProcedure Before Trial (The Rutter Group) §§ 7:1005, 7:1020.) If the anti-SLAPP is granted, the court may not grant leave to amend to allege or omitfacts demonstrating the complaint is not subject to the anti-SLAPP statute. (Simmons v.Allstate (2001) 92 Cal.App.4th 1068, 1073 [“Allowing a SLAPP plaintiff leave to amend thecomplaint once the court finds the prima facie showing has been met would completelyundermine the statute by providing the pleader a ready escape from [Code of Civil Procedure]section 425.16's quick dismissal remedy. Instead of having to show a probability of success onthe merits, the SLAPP plaintiff would be able to go back to the drawing board with a secondopportunity to disguise the vexatious nature of the suit through more artful pleading. This wouldtrigger a second round of pleadings, a fresh motion to strike, and inevitably another request forleave to amend.”]; Schaffer v. City and County of San Francisco (2008) 168 Cal.App.4th 992,1005.) A defendant party who prevails on an anti-SLAPP motion is entitled to recover his or herattorney’s fees and costs incurred on the motion, but not for the entire litigation. §425.16(c). Adefendant who prevails on only part of the motion may be entitled to an award of fees and costs(but only those associated with the successful part of the motion), unless the results of the motionwere so insignificant that the defendant did not achieve any practical benefit from the motion.The court has broad discretion in making this determination. (Weil & Brown, §7:1135.) B. Equitable indemnity A claim for equitable indemnity requires proof that the same harm for which plaintiffmay be held liable is properly attributable in whole or in part to the defendant. (Platt v. ColdwellBanker Residential Real Estate Services (1990) 217 Cal.App.3d 1439, 1445, fn. 7.) IV. DISCUSSION A. Defendant Schwartz has not met his initial threshold burden – cross-complaint’s cause of action for equitable indemnity does not arise from protected activity Schwartz moves to strike the cross-complaint against him for equitable indemnity. Thatclaim seeks to shift liability from USREC to others (including Schwartz) if plaintiff succeedssince USREC alleges those other parties are really at fault, not it. The proper focus here is todetermine the cause of Schwartz’s potential damages in the cross-complaint, and if that causesprings from Schwartz’s protected activity. Page 12 of 14 Schwartz will only be liable to USREC if plaintiff succeeds in proving USREC is not abona fide encumbrancer and invalidates the deed of trust. To do that, plaintiff will havesucceeded in proving the fraudulent scheme – in which plaintiff alleges Schwartz was a part. Thegravamen of the indemnity claim then is the underlying allegations in plaintiff’s FAC – thescheme – and not in any protected speech by Schwartz. “In determining ‘whether the challenged claims arise from acts in furtherance of thedefendants’ right of free speech or right of petition under one of the categories set forthin section 425.16, subdivision (e). [Citation.] … ‘[w]e examine the principal thrustor gravamen of a plaintiff’s cause of action to determine whether the anti-SLAPP statuteapplies.’’[Citation.] The ‘gravamen is defined by the acts on which liability is based, not somephilosophical thrust or legal essence of the cause of action.’ [Citation.] In other words, ‘for anti-SLAPP purposes [the] gravamen [of plaintiff’s cause of action] is defined by the acts on whichliability is based.’ [Citation.]” (Optional Capital, Inc. v. Akin Gump Strauss, Hauer 8 Feld LLP(2017) 18 Cal.App.5th 95, 111.) As mentioned, Schwartz fails to identify the category of free speech at issue. “Thedefendant's burden is to identify what acts each challenged claim rests on and to show how thoseacts are protected under a statutorily defined category of protected activity. [Citation.]” (Bonni v.St. Joseph Health System (2021) 11 Cal.5th 995, 1009; Baral v. Schnitt (2016) 1 Cal.5th 376,396.) The court finds this failure significant since it prevents a full analysis of the allegedprotected activity for the first anti-SLAPP step. Again, the only activity identified by Schwartz is “the filing of this instant action ascounsel for Mr. Neel and handling a completely unrelated trust account transaction.” (MPA p. 8.)But analyzing the acts on which Schwartz’s potential liability is based, there is no protectedactivity at issue here. Schwartz is only liable under the cross-complaint if the USREC deed oftrust is invalidated. The deed is only invalidated if plaintiff proves the fraudulent scheme, inwhich Schwartz allegedly participated. Schwartz’s conduct creating liability under the cross-complaint is not in any way protected activity – it does not arise from his representation of Mr.Neel. Instead, it arises from his tortious conduct against Mr. Neel, likely in contravention to hisethical duty to Mr. Neel. Since Schwartz fails to establish the alleged conduct is protected activity, the court neednot move to the second prong of the anti-SLAPP analysis. B. Civil Code §1714.10 and agent’s immunity do not afford Schwartz any protection here Schwartz’s argument that cross-complainants failed to comply with the pre-filingrequirements of Civil Code § 1714.10 is meritless. “No cause of action against an attorney for a Page 13 of 14civil conspiracy with his or her client arising from any attempt to contest or compromise a claimor dispute, and which is based upon the attorney’s representation of the client, shall be includedin a complaint or other pleading unless the court enters an order allowing the pleading thatincludes the claim for civil conspiracy to be filed after the court determines that the party seekingto file the pleading has established that there is a reasonable probability that the party will prevailin the action….” (Civil Code §1714.10(a).) There are no conspiracy allegations in the cross-complaint; Schwartz concedes this whenhe admits “[t]he Cross-Complaint insinuates a conspiracy between Mr. Neel’s former attorney(Schwartz) and others….” (MPA p. 9, emphasis added.) Further, the FAC does not allegeconspiracy between Schwartz and his client – it alleges a conspiracy by Schwartz against hisclient. That is not covered by section 1714.10, and if somehow a conspiracy under the codesection had been alleged, it was Schwartz’s duty to bring a motion to strike when he was namedas a Doe, not when he was named as a Roe to a different pleading. Schwartz’s contention that attorney-agency immunity insulates him from liability underthe cross-complaint is also misplaced. As stated, Schwartz is only liable for equitable indemnityif he’s established as a bad actor under the FAC, and in that case, he will be found to have actedagainst his client’s interests, not for them. C. Sanctions against Schwartz Prevailing cross-complainant USREC shall be entitled to reasonable fees and costsincurred on the special motion to strike (not the entire litigation). (CCP §425.16(c); LafayetteMorehouse, Inc. v. Chronicle Publishing Co. (1995) 39 Cal.App.4th 1379, 1383.) USREC seeks $9,490.00 ($7,300.00 for the prior withdrawn anti-SLAPP motion and$2,190.00 for the updated opposition to this motion). USREC’s counsel Edward Egan Smith’shourly rate is $365.00 and he declares he spent no less than 20 hours preparing USREC’sopposition to the initial motion and at least six hours updating and preparing this opposition. Thecourt finds that 13 hours of work is a reasonable duration of time preparing an opposition to thislatest motion and awards $4,745.00 in fees to USREC, payable by cross-defendant Schwartz nolater than 9/20/24.Notice to prevailing parties: Local Rule 2.10.01 requires you to submit a proposed formal orderincorporating, verbatim, the language of any tentative ruling – or attaching and incorporating thetentative by reference - or an order consistent with the announced ruling of the Court, inaccordance with California Rule of Court 3.1312. Such proposed order is required even if theprevailing party submitted a proposed order prior to the hearing (unless the tentative issimply to “grant”). Failure to comply with Local Rule 2.10.01 may result in the imposition ofsanctions following an order to show cause hearing, if a proposed order is not timely filed. Page 14 of 14

Ruling

CAPSTONE TURBINE CORPORATION VS TURBINE INTERNATIONAL, LLC

Aug 28, 2024 |20STCV04372

Case Number: 20STCV04372 Hearing Date: August 28, 2024 Dept: 68 Dept. 68 Date: 8-28-24 Case: 20STCV04372 Trial Date: 12-2-24 RELIEVED AS COUNSEL OF RECORD MOVING ATTORNEY: Candace Nam, Gordon Rees CLIENT: Defendant, Turbine International, LLC RELIEF REQUESTED Motion to Be Relieved as Counsel of Record SUMMARY OF ACTION On April 11, 2024, Plaintiff filed a complaint for Breach of Contract (three separate causes of action). On March 18, 2020, Turbine International, LLC answered and filed a cross-complaint against Capstone Turbine Corporation and James Coruse for 1. Breach of Contract [MDA] 2. Breach of Promissory Note 3. Breach of Contract [AR Agreement] 4. Fraud 5. Breach of the Covenant Of Good Faith and Fair Dealing 6. Unjust Enrichment and Constructive Trust 7. Negligent Misrepresentation 8. Violation of The Unfair Practices Act, Bus. & P. Code §17200, Et. Seq. 9. Violation of Racketeer Influenced Corrupt Organizations Act, and 10.Conspiracy to Commit Fraud. On August 19, 2020, the court granted Plaintiff leave to file a first amended complaint. On August 25, 2020, Plaintiff filed a first amended complaint for Breach of Contract, Breach of Contract/Guaranty, and Promissory Fraud. RULING: Granted. Counsel for Defendant Turbine International, LLC moves to be relieved as counsel of record, due to an irreconcilable differences, and unreasonable difficulty in representing the client. The motion complies with all procedural requirements. The motion is granted. Order not effective until served on the client. The corporate entities cannot appear in the action without representation from an admitted attorney. (Merco Constr. Engineers, Inc. v. Municipal Court (1978) 21 Cal.3d 724, 731.) Four additional motions to be relieved as counsel for additional defendants scheduled from September 11, through September 30, 2024. Moving counsel to provide notice to all parties.

Ruling

HALCO MANAGEMENT, INC., A CALIFORNIA CORPORATION VS SINA KOKABI, ET AL.

Sep 03, 2024 |24SMCV02979

Case Number: 24SMCV02979 Hearing Date: September 3, 2024 Dept: M CASE NAME: Halco Management Inc. v. Kokabi, et al. CASE NO.: 24SMCV02979 MOTION: Motion for Summary Judgment HEARING DATE: 9/3/2024 Legal Standard A party may move for summary judgment in any action or proceeding if it is contended the action has no merit or that there is no defense to the action or proceeding. (CCP, § 437c(a).) The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in¿Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.¿(CCP,¿§ 437c(f)(1).)¿If a party seeks summary adjudication as an alternative to a request for summary judgment, the request must be clearly made in the notice of the motion. (Gonzales v. Superior Court¿(1987) 189 Cal.App.3d 1542, 1544.)¿ [A] party may move for summary adjudication of a legal issue or a claim for damages other than punitive damages that does not completely dispose of a cause of action, affirmative defense, or issue of duty pursuant to subdivision (t). (CCP,¿§ 437c(t).)¿ To prevail, the evidence submitted must show there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.¿(CCP, §¿437c(c).)¿The motion cannot succeed unless the evidence leaves no room for conflicting inferences as to material facts; the court has no power to weigh one inference against another or against other evidence. (Murillo v. Rite Stuff Food Inc. (1998) 65 Cal.App.4th 833, 841.) In determining whether the facts give rise to a triable issue of material fact, [a]ll doubts as to whether any material, triable, issues of fact exist are to be resolved in favor of the party opposing summary judgment& (Gold v. Weissman (2004) 114 Cal.App.4th 1195, 1198-99.) In other words, the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences there from must be accepted as true. (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 179.) However, if adjudication is otherwise proper the motion may not be denied on grounds of credibility, except when¿a material fact is the witnesss¿state of mind and that fact is sought to be established solely by the [witnesss] affirmation thereof. (CCP, § 437c(e).)¿ Once the moving party has met their burden, the burden shifts to the opposing party to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. (CCP § 437c(p)(1).) [T]here¿is no obligation on the opposing party... to establish anything by affidavit unless and until the moving party has by affidavit stated facts establishing every element... necessary to sustain a judgment in his favor.¿(Consumer Cause, Inc. v.¿SmileCare¿(2001) 91 Cal.App.4th 454, 468.)¿ ¿ The pleadings play a key role in a summary judgment motion. The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues and to¿frame¿the outer measure of materiality in a summary judgment proceeding. (Hutton v. Fidelity National Title Co.¿(2013) 213 Cal.App.4th 486, 493, quotations and citations omitted.) Accordingly, the burden of a defendant moving for summary judgment only requires that he or she negate plaintiff's theories of liability¿as alleged in the complaint; that is, a moving party need not refute liability on some theoretical possibility not included in the pleadings. (Ibid.)¿ EVIDENTIARY ISSUES Plaintiffs request for judicial notice is GRANTED. Analysis Plaintiff Halco Management Inc. (Plaintiff) moves for summary judgment for possession on its unlawful detainer cause of action against Defendants, Sina Kokabi and Sina Motors Corp. (Defendants). Unlawful detainer is a summary proceeding to determine the right of possession of real property. (Culver Center Partners East #1, L.P. v. Baja Fresh Westlake Village, Inc. (2010) 185 Cal. App. 4th 744, 749.) In order to take advantage of this summary remedy, the landlord must demonstrate strict compliance with the statutory notice requirements. (Id.) Proper service on lessees of a valid three-day notice to pay or quit is essential to declaring lessors judgment for possession under Code of Civil Procedure section 1161. (Palm Property Investments, LLC v. Yadegar (2011) 194 Cal.App.4th 1419, 1425.) Code of Civil Procedure section 1161(2) provides that a tenant is guilty of unlawful detainer: When he or she continues in possession, in person or by subtenant, without the permission of his or her landlord, or the successor in estate of his or her landlord, if applicable, after default in the payment of rent, pursuant to the lease or agreement under which the property is held, and three days notice, in writing, requiring its payment, stating the amount which is due, the name, telephone number, and address of the person to whom the rent payment shall be made, and, if payment may be made personally, the usual days and hours that person will be available to receive the payment. . . Accordingly, the basic elements of unlawful detainer for nonpayment of rent are (1) the tenant is in possession of the premises; (2) that possession is without permission; (3) the tenant is in default for nonpayment of rent; (4) the tenant has been properly served with a written three-day notice; and (5) the default continues after the three-day notice period has elapsed. (Kruger v. Reyes (2014) 232 Cal.App.4th Supp. 10, 16.) Plaintiff presents the following evidence in support of its unlawful detainer claim against Defendants. The subject premises is located at 1781-1783 Westwood Boulevard, Los Angeles, CA 90024 (the Premises). (Halavi Decl., ¶¶ 2, 16; Ex. C; RJN Ex. 1.) On June 1, 2022, Plaintiff and Defendants entered into a written lease for an initial term of five years for the Premises. (Halavi Decl., ¶ 16; Ex. C [Lease].) Plaintiff is the landlord under the Lease. (Halavi Decl., ¶ 17.) The Lease provides for rent of $14,000.00 per month on the first of each month, and an annual rent increase of 3.5% or LA CPI, which is greater. (Id., ¶¶ 18-19.) In June 2024, Tenant owed an outstanding balance of rent for the months of March 2024 through May 2024, totaling $43,554.00 ($14,518.00 per month). (Halavi Decl., ¶ 20.) On May 28, 2024, Plaintiffs counsel served on Tenants counsel a Demand for Payment of Rent (the Demand Notice) pursuant to the Lease. The Demand Notice advised that Tenant had failed to pay Rent between the months of March 2024 and May 2024 in the amount of $43,554.00, and that if Tenant did not pay the amount due within three (3) days of the Demand Notice, Tenant would be in default of the Lease, and Plaintiff would be entitled to proceed against Tenant. (Goodkin Decl., ¶ 2; Ex. D.) Tenant did not remit payment pursuant to the Demand Notice. (Halavi Decl., ¶ 24.) On June 4, 2024, Plaintiff served a Three-Day Notice to Pay Rent or Quit for then-current amount of rent due, $43,554.00 (the 3-Day Notice) on Defendant. (Id.; Lauve Decl., ¶¶ 3-5, Exs. E-F.) Tenant failed to pay the full amount of the $43,554.00 estimated balance set forth in the 3-Day Notice, and Defendant is presently in possession of the Premises. (Halavi Decl., ¶ 28; Lauve Decl., ¶ 6.) The daily damages are $477.30 per day. (Halavi Decl., ¶ 31.) Plaintiff also shows entitlement to attorneys fees. (Id., ¶ 22.) With the above evidence, Plaintiff demonstrates a prima facie case for unlawful detainer under section 1161(2). Plaintiff shows that Defendants have defaulted for nonpayment of rent, the default continues after the three-day notice period has elapsed following a valid written three-day notice, and that Defendants remain in possession of the Premises. This showing shifts the burden of production to Defendants to present a dispute of material fact concerning possession. If Defendants fail to show a dispute of material fact, the motion for summary judgment will be GRANTED.

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